DTN Livestock Midday: Hogs Look for Continued Support While Cattle Veer Lower

    The cattle and lean hog futures are faced with different trajectories heading into the new week as the cattle contracts continue to worry over Friday’s Cattle on Feed report.

    GENERAL COMMENTS:

    The livestock complex is a mixed bag heading into Monday afternoon. Lean hog futures are partly keeping with last week’s rally, but the cattle futures are trending lower as the market frets over last week’s Cattle on Feed report.

    March corn is down 1 1/4 cents per bushel and March soybean meal is down $2.10. The Dow Jones Industrial Average is down 975.42 points and NASDAQ is down 593.98 points.

    LIVE CATTLE:

    Live cattle futures are taking a jolting ride to lower prices as the market reacts emotionally to Friday’s Cattle on Feed report. February live cattle are down $2.10 at $135.82, April live cattle are down $2.80 at $139.30 and June live cattle are down $2.40 at $134.90. If feedlots get anxious and sell early this week, packers are undoubtedly going to push for lower prices.

    But if feedlots can stand united and push trade to the latter half of the week, the market stands a better chance at trading steady to potentially higher. The Cattle on Feed report may have your spirits weakened as a 6% jump in placements seems unmanageable — but remember that given the year producers have face, where else were the cattle supposed to go?

    Thankfully, the market saw the lighter weight feeders more heavily placed than heavier cattle, which means those cattle won’t be marketed until summer, so the spring rally won’t be oversupplied. New showlists appear to be mixed: higher in Kansas, but lower in Texas, Nebraska and Colorado.

    The majority of business took place on Tuesday and Wednesday last week, with just a little scattered trade on both Thursday and Friday. Northern dressed deals had a range of $217 to $218, mostly $218, generally steady with the prior week’s weighted averages, a good many of these cattle are set for delivery in the weeks of Jan. 31 and Feb. 7. Southern live trade had a full range of $135.50 to $137, mostly $137, $1 to $1.50 higher than the previous week’s weighted averages.

    Last week’s negotiated cash cattle trade totaled 74,145 head. Of that 72% (53,164 head) were committed for nearby delivery, while the remaining 28% (20,981 head) sold for deferred delivery.

    Boxed beef prices are higher: choice up $0.35 ($292.76) and select up $1.69 ($284.02) with a movement of 26 loads (17.93 loads of choice, 4.39 loads of select, 0.02 loads of trim and 3.80 loads of ground beef).

    FEEDER CATTLE:

    With the live cattle complex trending lower and placements already taking up a large majority of feed bunk space, the feeder cattle complex is trending in a worried fashion. January feeders are down $2.00 at $158.27, March feeders are down $4.47 at $158.82 and April feeders are down $3.77 at $164.40.

    Adding to the market’s disgruntled attitude is the fact that nearby corn prices are still trading well above $6.00 a bushel. So it wouldn’t be surprising to see feeder cattle buyers hesitant in sale barns early this week.

    LEAN HOGS:

    After a long period of hem-hawing around and wondering whether the market should keep with last week’s robust rally, lean hog futures have begun to trade mildly higher in the nearby contracts. February lean hogs are up $0.35 at $86.55, April lean hogs are down $0.07 at $94.92 and June lean hogs are up $0.45 at $105.25.

    With the cash market seeing support, and with pork cutout values seeing interest at midday, traders are hopeful the market will continue to see demand and keep with its quest of higher prices.

    The projected CME Lean Hog Index for 1/20/2022 is up $0.72 at $77.51 and the actual index for 1/19/2022 is down $0.06 at $76.79. Hog prices are higher on the National Direct Morning Hog Report, up $1.36 with a weighted average of $61.81, ranging from $60.00 to $75.00 on 2,405 head and a five-day rolling average of $65.44. Pork cutouts total 210.15 loads with 182.67 loads of pork cuts and 27.48 loads of trim. Pork cutout values: up $8.89, $102.18.

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